U.S. Markets Sell Off As Oil Makes New High

New York, NY (AHN) - All three major indices finished at their session low Wednesday as oil topped $144 a barrel, setting another all-time high.

After briefly trading above $144 a barrel, oil settled at $143.58, a new record-high close. The commodity saw strength after the weekly inventories report showed a bigger decline than expected.

Selling was broad-based Wednesday as all 10 major economic sectors finished lower.

The Dow Jones Industrial average shed 167 points or 1.5 percent, closing at 11,215. Wednesday's close puts the Dow nearly 20 percent lower than the high reached in October 2007.

With oil rising, the Dow Jones Transportation average dropped more than 4 percent as airline stocks were sold off. The Amex Airline Index shed more than 6 percent in Wednesday trading.

The S&P 500 was lower 23 points or 1.8 percent, closing at 1,261. The three largest sectors in the S&P 500-tech, energy and financials-were all down more than 1 percent.

The Nasdaq Composite dropped 53.5 points or 2.3 percent, closing at 2,251.

The worst performing sector on the session was materials, down 5.2 percent.

Shares of General Motors (GM) marked a 54-year low, closing below $10 a share at $9.98. Selling was sparked by a Merrill Lynch downgrade amid cash concerns for the automaker.

On the economic front, May factory orders rose by 0.6 percent according to the Commerce Department. The market expected 0.5 percent.

Another indicator of the nation's job market was reported worse than expected as the ADP employment number was down 74,000 vs. the negative 25,000 expected.

Thursday will be a half day and marks the last session for the holiday-shortened week. The markets close at 1 p.m. Eastern. Initial jobless claims and nonfarm payrolls will be reported before the open.